House Passes Bonus Depreciation Bill

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The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.

The measure, HR 4718, which was crafted by Representative Pat Tiberi (R-OH), was approved by a 258-to-160 vote. Thirty-four Democrats voted for the legislation, while two Republican lawmakers voted against it.

Representative Richard Neal (D-MA) pitched a proposal before the final vote to recommit with instructions to the House Ways and Means Committee, which would have required the bill to be reported back to the House with an amendment to extend bonus depreciation for two additional years instead of permanently. That proposal was struck down by a vote of 191 to 229.

Under HR 4718, businesses would be able to claim an additional first-year depreciation tax deduction equal to 50 percent of the value of qualified property investments, such as machinery and equipment. Tiberi said in May that permanently extending the tax break will help companies better access capital, invest in new facilities, and create jobs.

“This tax feature is popular with business and farms because it helps manage cash flow, minimize tax liabilities, and reduce the need to borrow from lenders,” Representative Richard Hanna (R-NY) said in a written statement on Friday. “Overall, bonus depreciation makes it easier and more affordable for businesses to make costly capital investments which are necessary to grow their operations and create new jobs.”

Additionally, the bill would allow taxpayers to claim a portion of unused alternative minimum tax (AMT) credits in lieu of bonus depreciation. The bonus depreciation and AMT provisions both expired on December 31, 2013.

The legislation, which according to an estimate from the Joint Committee on Taxation would add roughly $287.4 billion to the federal deficit over the next 10 years, was passed by the House Ways and Means Committee on May 29.

Randall Stephenson, chairman and CEO of AT&T Inc. and chairman of the Business Roundtable, said in a statement on Friday: “Today’s House vote is a positive step toward accelerating higher business investment and growth, which are needed to restore the productive capacity of the US economy and propel job creation. Fifty percent expensing reduces the cost of capital for business investment, thereby allowing business to undertake a greater amount of investment, so the Senate should act without delay.”

However, the bill is expected to stall in Congress as the Senate is unlikely to vote on any tax break legislation before the November midterm elections.

Even if the Senate were to pass the House’s proposal to permanently extend bonus depreciation, President Obama’s senior advisors would recommend that he veto the bill.

The White House criticized the legislation on Thursday, saying the bonus depreciation provision was enacted in 2009 to provide short-term stimulus to the economy, and it was never intended to be a permanent corporate tax cut. The Obama administration also said the bill includes no cost offsets, and the $287 billion price tag would wipe out more than one-third of the deficit reduction achieved by the American Taxpayer Relief Act of 2013.

“The deficit increase in HR 4718 is more than 20 times the cost of the proposed extension of emergency unemployment benefits, which Republicans are insisting be offset, and more than triple the discretionary funding increases for defense and nondefense priorities enacted in the Bipartisan Budget Act of 2013, which were offset,” the White House said. “House Republicans also are making clear their priorities by rushing to make business tax cuts permanent without offsets even as the House Republican budget resolution calls for raising taxes on 26 million working families and students by letting important improvements to the Earned Income Tax Credit, Child Tax Credit, and education tax credits expire.”

The Obama administration added that it wants to work with Congress to make progress on measures that strengthen the economy and help middle-class families, including pro-growth business tax reform.

“However, making costly business tax cuts permanent without offsets represents the wrong approach,” the White House said.

Related article:

White House Opposes House GOP’s Bonus Depreciation Bill

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Interesting that the President is opposed the bills that will stimulate and SUSTAIN jobs. The cost of this legislation is more than offset by the taxes payed by increased production and labor taxes...very short sighted on behalf of the anti-business cartel...

Billionaires just keep getting richer and the middle class stagnant, yet your stupidity doesnt allow you to see these "SUSTAINED JOBS" keep being shipped to China.
The issue isnt being opposed to it, its been in existence for 12 years. It is the issue of making it permanent. By doing so, the incentive is gone, and businesses simply sell off quickly.
I dont understand why you still think trickle down economics still work. These companies tend to buy equipment and send the jobs to China. More than 50,000 factories have been moved or shut down in the US. Why you think corporations would out of the goodness of their hearts spread the wealth is ignorant and irresponsible. Continuing economic models that have been faiiling for the past 30 years is stupid.
I'm a current engineering college student and I am curious... what state do you live and work?, cause your "SUSTAIN jobs" through such irresponsible behavior has been disproved time after time. I bet you're one of those ignorant morons who's on government subsidies yet openly reject Obamacare though u benefit from it.
These companies get tax cuts and rather than bring jobs to the U.S. increase profits through slave labor in China.
Obama just asked for 3.7 billion to process these immigrants and deport them faster, in addition to a little under 7 billion to fix our failing infrastructure (I'm an engineer, so I know) and yet its denied.
You seem to forget that America's greatest economic times came during regulations (Roosevelt) and infrastructure building (Eisenhower), not welfare to the rich.

Sigh. Those jobs went and keep going overseas thanks to Unions.Those factories are going overseas cause Union workers demand top pay for minimal skill jobs. We still think trickle down economics works because it does work. There is no such thing as the Obama suggested trickle up economics. Most poor people are poor due to poor life decisions. Many people come from terrible situations and neighborhoods, upbringings etc and make something of themselves. They used hard work and good decision making to do so. Dis proven by the likes of ignoramus Paul Krugman? Ha. Look at unemployment under Obama. Hell, for how many years did he have total control with both the Senate and the House in Democrat control. Look at unemployment under Bush. Basically full employment. Then the Democrats took over the house and senate and boom. Things start getting worse.

You actually think Obama is going to deport these illegals faster? Are you really that stupid? he wants them here and is already discussing how to go around congress and make them legal. He wants them here. Those illegals he is bringing over and giving legal status to, like the millions he did a a few years ago, are going ti be taking American jobs and causing the American worker to stay unemployed.

America;s greatest economic boom was aided greatly by world wars and European countries being decimated and unable to produce.

If you want to know why the gap widens between the rich and the poor look no further than liberalism and Democrats. They preach against personal responsibility and do everything they can to make you dependent on the government.

What you fail to understand is that corporations don't pay taxes. They pass that cost on to the consumer. Raise their taxes and their goods and services cost go up.

Jobs go overseas thanks to unions? The industrial revolution of the 1890s and early 20th century saw the complete destruction of the working class due to lack of minimum wages and companies taking advantage of their workers. Without unions at that time, american workers would be working like the chinese workers for $2 an hr. Since the introduction of the Reagan trickle down economic system, the middle class has been stifled... dude, even Wikipedia has the answer to this, pls research and get back to me...
By the way union membership is declining at an increasing pace yet factories keep being shipped overseas so your point is mute. Are you telling me that companies out of the goodness of their heats would bring back these jobs and neglect chinese cheap labor?
since FDR took over and regulated these companies that ran amok during the roaring twenties we did not have a major economic recession until the late 70s. Reagan's trickle down economics of the 80s saw the increase of the wealth of the top 1% and the stagnation of the middle class leading to the first deficit since the end of the war. Clinton turned that around and Bush Jr.'s first term was a result of that.
You have the audacity to tell me the derivatives used by the banks due to deregulation was the fault of democrats? The republican motto is deregulation.
The democrats had full control of a filibuster proof congress for 4 months... Pls do your research and dont BS me. (stop spewing your FOX news here)
Obama has deported MORE ILLEGALS than any other president in our history (again, DO YOUR RESEARCH), yet you say he is bringing them here.
You're telling me that the gap between the rich and poor is due to a lack of personal responsibility? The gap widened during the 80s and has been growing since. Why? Because workers wages has been constant and has not been keeping up with rising costs, why you think that is democrats fault is beyond me.
I dont think you understand how taxes work (you really need to do your research)... Are you advocating for them not to pay taxes so your goods stay the same price? Your unwavering trust for companies that take advantage of the american worker whether or not they are taxed is just beyond me.
All your points can be answered if you simply look somewhere other than FOX news, and no i dont watch stupid msnbc.
Obama is not a great/good or president, but please dont spew nonsense and call them facts. Unemployment is down, economy is recovering, wars are coming to an end, 9 million people have health care
We are 17 trillion in debt cause Obama had to put the wars and medicare part D on the books. The recovery also took a chunk of that.
btw, I'm an engineering/economics major, and I sincerely need you to prove what you are telling me like I just did. I think the problem with our huge partisanship is due to networks like FOX and MSNBC, they tend to distort facts (FOX especially). Look up what I just wrote and you'll understand

When you own your own business- you can have an opinion (at least that any person that created a job) we will listen to. I employ 200 persons, just took a 75k hit to our profit line due to Obamacare, and now have to save every dollar we have and some that we don't just so I can pay my taxes in April- five months from now. If the depreciation legislation was passed- I would immediately spend several hundred thousand dollars on asset purchases. These purchases would provide work for hundreds of persons. That is how the system works. Get out of collage first, start a business, then post your "ideas" on this site.

Question Business Owner............did you provide health care to your employees prior to the ACA? I applaud you for having 200 employees on your team. But as a tax payer I grew tired of subsidizing business owners who made profits but failed to provide health care coverage for their employees. Like it or not the college kid is correct with most of what he's saying. He's wrong saying Obama is not a great president. He's a phenomenal president (my opinion). He's the only president who has been able to accomplish what he has without the help of a republican controlled congress. I always thought reasonable people could put aside their grievances and do what's right for the country.

Not interesting. It is par for the course.

Over 3 million former long-term employed, tax-payers, cut off from unemployment benefits, at no fault of their own and the Republicans in the House continue to ignore them. Too many millionaires in Congress, that's why any tax related bill gets fast tracked, while the elected officials who are suppose to be the eyes, ears and mouth of the people, have allowed the LTUs to sink further into poverty.

Learning about this today. Wondering where this bill stands. This is a tough call. The tax brake helps dividend paying companies, like ATT, distribute more of their 87% payout on earnings. I wonder how much tax is collected on the dividend payouts, for the large publicly traded companies that pay out a fix percentage of earnings as a dividend, in comparison to the tax brake. I'm wondering if the $287B number is a true tax brake number

we kinda need to get more strict on this because many companies are in fact using it when their appliances are not even worn out. if we cut this by a max $10 Billion (currently costs 76 Billion annually) we can provide free education for students, among other things.